ZTE shares plunge on profit guess
By Zhu Shenshen |
July 17, 2012, Tuesday
|
Print Edition
Print Edition
ZTE Corp shares tumbled 9.98 percent to a record low yesterday after China's biggest public telecommunications equipment maker announced last Friday its first-half net profit likely dropped 60 to 80 percent compared to a year earlier.
ZTE closed at 11.72 yuan (US$1.9) and its fall compared with a 2.57 percent drop on the Shenzhen Stock Exchange yesterday.
The uncertainty of the global economy, which forces overseas telecommunications carriers to cancel or delay network investment plans, and the fierce competition in the entry-level smartphone market have eroded ZTE's profit margin, according to Sinolink Securities analyst Chen Yunhong.
"The external business environment won't change in the short term," Chen said in a recent note regarding ZTE.
In the first half, ZTE's estimated net profit was 154 million yuan to 308 million yuan, a 60 to 80 percent drop from a year ago, it said in a statement to the Shenzhen Stock Exchange after trading ended last Friday.
The company didn't reveal any reason for the profit drop.
ZTE's share price has dropped about 30 percent in the past two weeks.
Meanwhile, more firms, including Internet giants such as Baidu and 360Buy.com, launched entry-level smartphones. Most of these handsets cost less than 1,000 yuan and have grabbed market share from Huawei and ZTE, analysts said.
ZTE closed at 11.72 yuan (US$1.9) and its fall compared with a 2.57 percent drop on the Shenzhen Stock Exchange yesterday.
The uncertainty of the global economy, which forces overseas telecommunications carriers to cancel or delay network investment plans, and the fierce competition in the entry-level smartphone market have eroded ZTE's profit margin, according to Sinolink Securities analyst Chen Yunhong.
"The external business environment won't change in the short term," Chen said in a recent note regarding ZTE.
In the first half, ZTE's estimated net profit was 154 million yuan to 308 million yuan, a 60 to 80 percent drop from a year ago, it said in a statement to the Shenzhen Stock Exchange after trading ended last Friday.
The company didn't reveal any reason for the profit drop.
ZTE's share price has dropped about 30 percent in the past two weeks.
Meanwhile, more firms, including Internet giants such as Baidu and 360Buy.com, launched entry-level smartphones. Most of these handsets cost less than 1,000 yuan and have grabbed market share from Huawei and ZTE, analysts said.
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